Retirement is getting screwed

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RETIREMENT is changing, it will effect peoples lives, not in a helpful way. This is just the FIRST of MANY planned.

The IRS(Government is screwing US again). This time they are making you work harder for your future. Their first change is the limits on Americans’ catch-up contributions, for their retirement accounts. The new law will start to take effect 2025 but the IRS expects the full transition should be completed by 2026.

The IRS announced that they are putting an administrative transition period in place until 2026 to extend the new requirement that catch-up contributions made by individuals participating in a 401 K or a retirement plan be treated as after-tax Roth contributions. The change delays the shit part of a rule that Congress approved last year as part of the Secure 2.0 Act

Americans aged 50 and older have previously been able to make catch-up contributions to put extra cash into their retirement accounts above the contribution limit. Let me explain, eligible savers can deposit a catch-up contribution of up to $7,500 into their 401 K plans or retirement accounts above the $22,500 cap in 2023

Under the screw American Secure 2.0 Act, which became law as part of a year-end appropriations package enacted by Congress in December 2022, the new catch-up contribution rule would require earners put their catch-up contributions in after-tax accounts subject to Roth rules

The policy applies to individuals who earned more than $110,000 from a single employer in the prior year and to catch-up deposits into 401 K, 403 B or 457 B retirement plans

This means that earners wouldn’t receive the same tax break they’ve come to rely once the screw American Secure 2.0 changes take effect, because they wouldn’t be permitted to make pretax catch-up contributions, which reduce the size of the saver’s income subject to tax

The IRS's delay allows savers to continue to make pretax catch-up contributions through 2025 as the government implements the policy change. It also clarified that plan participants ages 50 and up can continue to make catch-up contributions after 2023 regardless of their income level

The transition period is supposed to allow time for people to educate themselves on the new Roth catch-up requirement and is designed to allow people time to get over being pissed that we are getting screwed again, also to try and give people time to make sure that everything is in compliance with that requirement. They didn't give any information on the penalties in regards to this new law.

And as an added bonus, the Treasury Department(YAY) and IRS will update earners on different aspects of the Secure 2.0 Act as well as the other changes that plan to take effect at various times because of the initial delay in putting this new law in effect.

I'll be honest, half of me is excited about this law, because the jackals are getting exactly what they deserve because this is what they voted for, the other half of me is MAD, because the other half, have to pay for their decision.